With the ASIC report released this week written from the consumer’s perspective, the industry should listen carefully, said Loan Market chairman Sam White, who also raised some concerns about what was included.
The research was commissioned by ASIC in January 2018 and surveyed first home buyers, refinancers and consumers who had taken out a home loan before. It followed these borrowers throughout the process of taking out a home loan, whether they ended up taking the loan or not.
The Looking for a mortgage: Consumer experiences and expectations in getting a home loan report said that mortgage brokers were “inconsistent in the ways they presented home loan options to customers”.
White said many mortgage brokers will feel disappointed by the report “as once again, their commitment to their customers is questioned”.
He added that the report highlighted three things for him: the first being the importance of technology.
He said technology will play a big role in not only how brokers assess the vast range of loan products, but also how brokers can present information to customers in a clear and professional manner.
Secondly, he mentioned a part of the report discussing the number of loan options clients were presented.
“I’m concerned that an inference could be drawn from these comments that a broker only researches a few options rather than using the broader panel,” he said. “At Loan Market, our brokers have access to a list of individual loan products totalling a huge 25,285.
“In the future, it may be helpful for the technology systems to show clients more of the research and detail that sits behind these recommendations and how they are aligned to the clients stated recommendations.”
Finally, ASIC noted one of its learnings from the research was that the home loan journey is complex, multifaceted and nonlinear.
“This statement highlights why we are asking regulators to provide guidance and clarity as to what brokers need to do to comply with the impending Best Interest Duty,” White said.
“We look forward to digesting the contents of this important ASIC report and implementing any recommendations that could further improve customer outcomes.”
Not everyone was disappointed by ASIC’s report, however. FBAA managing director Peter White welcomed the release saying he was “really pleased with the outcome”.
Taking a more positive outlook, he said the industry was always looking at how it can improve. What he did take an issue with, however, was the response from consumer group CHOICE, which slammed the mortgage broking industry yet again after the release.
Peter White said, “Once again, this group has highlighted their disturbing lack of real understanding into the broking sector. They are creating issues that simply don’t exist.
“I thought CHOICE was meant to provide an independent and unbiased assessment, yet here they are again making extreme, unsubstantiated claims. Our industry is completely supportive of best interest duty,” he said.